Home prices still falling and that continues to have an impact on the housing market. CoreLogic is interpreting the data positively but the implementation of the $26 billion dollar mortgage settlement means more foreclosures are coming to weigh down home values.
CoreLogic a leading provider of housing market and real estate trend information released its March Home Price Index (HPI) this week, and the report contained a mixed bag of news. While average national home prices were up 0.6 percent in March 2012 versus February of this year, the first month-to-month increase posted since July 2011, our collective joy should be tempered by the information that last March’s home values were also 0.6 percent lower than the same month last year.
In short, year over year we’re still losing home value ground. CoreLogic however has adopted a glass half full attitude, noting that when distressed sales are excluded (and there are still many of those), prices climbed for the third month in a row. “This spring the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in house prices,” said Mark Fleming, chief economist for CoreLogic. “Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales.”
Ok, but what happens in the aftermath of the $26 billion dollar mortgage settlement and the wave of pending foreclosures, long in limbo, that will suddenly become “unstuck?” What effect will that have on home values going forward? It’s too early to tell but there is every reason to expect further decline over the remaining months in 2012.
If in fact distressed sales are taken into account, we see a familiar cast of characters on the five states registering the largest month-to-month home value depreciation. Nevada shed another 5.8 percent in equity while Georgia lost 7.3 percent. Illinois waved adieu to a whopping 8.3 percent in average value.
The numbers are far less frightening without the inclusion of short sale, foreclosure and other distressed data, but isn’t that akin to counting the unemployed without figuring in those who are out of work?
Will those renting a home continue to stay out of the housing market until prices stabilize?